Thursday, Feb 22, 2024

US stocks slip as traders digest soft jobs data ahead of Friday employment report

A trader works on the floor at the NYSE in New York
  • US stocks ended lower Wednesday as traders took in soft private jobs data.
  • Bond yields ticked lower as investors priced in lower interest rates in the economy.
  • Meanwhile, oil prices plunged, with Brent and WTI crude both shedding around 4%.

US stocks ended lower on Wednesday as investors took in soft private payrolls data and looked ahead to highly anticipated November jobs report, which is set to be released this Friday.

Bond yields fell as investors priced in lower interest rates amid data showing the economy may be softening and that the Federal Reserve could soon cut interest rates.

Oil prices plunged as the US saw a rise in gas inventories compared to the prior week, with US oil prices closing below $70 a barrel for the first time since June. Brent crude, the international benchmark, fell 4% to trade around $74.32 a barrel.

Private companies hired less than expected last month, adding 103,000 jobs in November, ADP reported. That's lower than the expected 128,000 — a sign that the labor market could be cooling and the Fed could have a reason to dial back its interest rate hikes in the economy.

Comerica Bank predicted that payrolls will cool to 110,000 in the government's November jobs report, while unemployment would tick higher to 4%.

Markets also remain optimistic over the prospect of Fed rate cuts in 2024. Investors are pricing in a 60% chance the Fed could trim interest rates by March of next year, according to the CME FedWatch tool. Meanwhile, the yield on the 10-year Treasury eased four basis points, trading around 4.12% Wednesday afternoon.

"The softer turn of recent labor market releases reduces the risk that inflation pressures revive due to wage-price issues, making it easier for the Fed to pivot to rate cuts in 2024," Comerica chief economist Bill Adams said in a statement.

Here's where US indexes stood at the 4:00 p.m. closing bell on Wednesday:

  • S&P 500: 4,549.34, down 0.39%
  • Dow Jones Industrial Average: 36,054.43, down 0.19% (-70.13 points)
  • Nasdaq Composite: 14,146.71, down 0.58%

Here's what else is going on today:

  • Oil prices are crashing. Blame uncertain demand and booming US production.
  • An early Santa Claus rally has come for crypto.
  • America's "free lunch" attitude about its debt will change as it faces higher-for-longer interest rates for the next decade, a Harvard economist said.
  • Saudi Arabia just trimmed oil prices for Asian customers as booming US exports add competition.

In commodities, bonds, and crypto:

  • West Texas Intermediate crude oil plummeted 4.05% to $69.39 a barrel. Brent crude, the international benchmark, fell 3.57% to $74.30 a barrel.
  • Gold ticked 0.42% higher $2,027.8 per ounce.
  • The 10-year Treasury yield dropped four basis points to 4.123%.
  • Bitcoin edged 0.57% higher to $44,023.
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By: [email protected] (Jennifer Sor)
Title: US stocks slip as traders digest soft jobs data ahead of Friday employment report
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Published Date: Wed, 06 Dec 2023 21:09:38 +0000